World Bank’s climate obsession is betraying its core mission to end poverty
By Anand Sharma
In a major policy shift that could reshape global development priorities, the United States has called on the World Bank to abandon its disproportionate focus on climate change and return to its founding mission: ending poverty.
US Treasury Secretary Scott Bessent made the appeal this week, criticizing the institution for devoting nearly half of its financing to climate projects – a staggering 45 percent – and urging it instead to invest in projects that “increase access to affordable and reliable energy, reduce poverty and boost growth.”
The message is clear and long overdue. The World Bank was not created to become a global climate fund. Established at the end of the Second World War, it was designed to rebuild war-torn economies and later took on the task of lifting developing nations out of poverty. Yet, in recent years, the institution has strayed far from this core purpose, pouring billions into climate-related projects that have yielded negligible results for the world’s poorest populations.
Since the 2015 Paris Climate Agreement, the World Bank has rebranded itself as a leader in green finance. Last year alone, it spent a record $42.6 billion on climate projects – funds that could have been used to provide basic health care, expand education, or build vital infrastructure in impoverished regions. Instead, this money has been redirected into climate schemes that, while politically fashionable in Western capitals, do little to address the daily struggles of billions living without electricity, clean water, or adequate food.
Saudi Arabia, notably, has aligned with Washington in opposing excessive climate spending. The Kingdom’s position underscores a growing recognition among developing and energy-producing nations that climate orthodoxy – especially the aggressive push toward renewables – risks deepening global inequality.
The evidence supporting Bessent’s argument is overwhelming. Numerous studies show that dollar for dollar, traditional development investments deliver far greater and faster benefits than climate-focused spending. Programs that improve maternal health, expand e-learning, or enhance agricultural yields produce measurable results within years – sometimes months. By contrast, climate mitigation projects aimed at cutting emissions in poor nations offer almost no immediate improvement to human welfare and have minimal long-term climate impact.
Adaptation measures such as flood defenses or drought management are more defensible, but even these pale in comparison to the cost-effectiveness of core development programs. The uncomfortable truth is that the world’s poor need nutrition, health care, and education far more urgently than they need wind turbines or carbon credits.
World Bank President Ajay Banga has insisted that poverty and climate should be tackled “jointly.” But this convenient rhetoric collapses under scrutiny. Poverty reduction through education, health, and nutrition can lift millions within a decade. Tackling poverty “through climate action,” however, will yield virtually no measurable benefits by 2030 – and only marginal gains by the end of the century.
The irony is that climate policy, as currently pursued, often harms the very people it purports to help. By driving up the cost of fertilizers, energy, and transportation, climate mandates make life more expensive for farmers, workers, and small businesses in developing countries. When a family must pay more for fuel or electricity, they have less to spend on food, medicine, and schooling.
As Bessent emphasized, developing nations today need what rich countries once needed to industrialize: cheap, reliable energy. That means coal, gas, and oil – the same resources that powered the West’s prosperity and, more recently, China’s remarkable rise. Denying poor countries access to affordable fossil fuels while demanding they leapfrog to expensive renewables is not climate justice; it is climate hypocrisy.
Nowhere is this contradiction more visible than in Africa. Most of the continent remains energy-poor, dependent on wood and hydro power. The average African uses as much fossil fuel in a year as an American consumes in less than nine days. Yet Africa’s need for energy is immense and urgent: hundreds of millions remain without access to electricity, stifling industrial growth and job creation.
The World Bank’s Mission 300 initiative, which aims to connect 300 million additional Africans to electricity by 2030, is an admirable goal. But it risks being undermined by the Bank’s obsession with renewables. The Rockefeller Foundation, a partner in Mission 300, calls renewables “the most cost-effective and rapid route to prosperity.” That claim, however, does not withstand real-world scrutiny.
While solar and wind power can be cheap under ideal conditions, they are unreliable and costly to sustain without backup. When the sun sets or the wind stops, the electricity stops too – unless expensive storage or fossil fuel backup is in place. Across the world, countries that rely heavily on renewables experience higher energy prices. That’s why even wealthy nations – despite their green rhetoric – still derive over 75 percent of their energy from fossil fuels.
African governments understand this better than anyone. While they speak politely about sustainability in international forums, their actions tell another story. In 2023, Africa added five kilowatt-hours of electricity per person from solar and wind – but added almost five times more from fossil fuels. Across total energy use, fossil fuel consumption grew twenty-two times faster than renewables. Developing countries are choosing reliability over ideology, and rightly so.
This is not to deny the reality of climate change or the need for innovation. But as the US and Saudi Arabia have rightly pointed out, the solution lies in research and development, not in depriving the world’s poor of affordable energy. Rich governments should channel resources into developing breakthrough technologies – such as next-generation nuclear power, scalable carbon capture, and cost-efficient energy storage – that can deliver clean, reliable energy without crippling economies.
Until such technologies exist, poor nations should not be penalized for pursuing the same path to prosperity that wealthy nations took. The World Bank must refocus on its true mandate: ending poverty, not policing carbon. Redirecting development funds toward climate projects may please activists in Western boardrooms, but it is an affront to human suffering in the developing world.
If the World Bank truly wishes to make history again, it must remember its origins. The path to a sustainable future begins not with ideology, but with empowering the poor – with jobs, power, education, and hope. Anything less is a betrayal of the very people it was created to serve.
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